If you are looking for bright spots in the global economy then the Gulf Oil States record $350 billion trade surplus is a standout. Other hydrocarbon producers like Russia also got this huge handout last year.

It contrasts with the $117 billion financial and capital account deficit posted by China last week, the worst since records began in 1982. That appears to have been the cost of keeping its economy growing during a global economic slowdown.

Record oil revenues

The Oil States were far luckier. Chinese economic growth helped them to expand their overseas earnings to record levels, and the money printing by central banks supported oil prices close to record highs.

China's foreign exchange reserves still swelled by $128 billion to $3.3 trillion., and the Gulf Oil States also racked up record foreign reserves. Chinese trade still recorded a $214 billion surplus,; the losses came elsewhere.

Gulf petrodollars are now being invested closer to home. There has been $10 billion promised to Egypt to assist its transition and $9 billion for troubled Bahrain.

GCC governments have also massively ramped up spending at home to quell any possible unrest by engaging their populations with the new prosperity.

Huge salary hikes for officials have set off tourism booms in places like Dubai that is also benefiting from its safe haven reputation. An inflow of new residents has mopped up excess housing capacity and the city is building again.

The big question for the GCC is how long its trade boom can continue when all its customers' economies look pretty sick. The Chinese financial and capital account deficit is surely not a very bright indicator either.

1970s-style boom?

In the late 1970s a similar kind of global economic scenario played out for some years with very high oil prices in relation to the state of the consumer countries' economies that then demonstrated 'stagflation' or high unemployment with low growth and high inflation. We have not seen the inflation yet this time.

This was the first Oil Boom. We now seem to be in a similar era, unless the fragile global economy takes another nasty turn for the worse. The rise in the US unemployment rate last week, poor US consumer confidence surveys and the fall in US GDP in the fourth quarter do not augur well.

But the central bank remedies being applied could just keep the petrodollars flowing into GCC and Russian coffers. Everybody else is in trouble.